India's Economic Indicators Indicate Strong Growth: Industrial Production Increases, Inflation Slows in February

India's economic indicators in early 2025 depict strong growth and slowing inflation, as per government data made public on Wednesday, March 12, 2025.

Industrial production, as gauged by the Index of Industrial Production (IIP), rose by 5.0% on a year-on-year basis in January 2025, above Reuters' expectation of 3.5%. The manufacturing sector led the increase, rising 5.5%. Industrial production for the April-January part of the ongoing fiscal year went up by 4.2%.

On the inflation side, India's Consumer Price Index (CPI) inflation softened to a seven-month low of 3.61% in February 2025 from 4.26% in January and below the Reserve Bank of India's medium-term target of 4%. This was softer than the 3.98% that economists had forecast in a Reuters poll. Food inflation, a major share of the CPI basket, also softened to 3.75% in February from 5.97% in January.

The mix of robust industrial growth and declining inflation gives the RBI scope to think about further monetary policy relaxation to stimulate growth. The central bank had reduced the repo rate by 25 basis points to 6.25% in its previous policy meeting.

These encouraging economic signs are indicative of India's economy being on a steady growth path without inflationary pressures.

Sources: Reuters, Business Standard, Ministry of Statistics and Programme Implementation